Friday, Sep 13 2013
• 12 p.m. (ET)

The Politics Hour – Sept 13, 2013

An investigation into an alleged “shadow campaign” in D.C.’s mayoral race extends into the 2008 race for president. Activists in Western Maryland call for breaking off five counties and forming a new state. And high-profile Democratic and Republican figures in Virginia make waves by switching sides and backing candidates from the other party. Join us for our weekly review of the politics, policies and personalities of the District of Columbia, Maryland and Virginia.

Guests

Tom Sherwood
Resident Analyst; NBC 4 reporter; and Columnist for the Current Newspapers

Featured Clip

Stephen Cordi, deputy chief financial officer, responds to a recent Washington Post report which found the D.C. Office of Tax and Revenue sold property tax liens on homes to private investors. Cordi said the findings of the investigation were dated and it’s not an ongoing practice. He noted the tax office now has a minimum threshold of $1,000 for selling delinquent property taxes. “There have been some sales less than $1,000, but nothing for a few hundred dollars,” Cordi said.

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Transcript

12:06:44

MR. KOJO NNAMDIFrom WAMU 88.5 at American University, in Washington, welcome to "The Politics Hour," starring, once again, Tom Sherwood. Tom Sherwood is our resident analyst. He's an NBC 4 reporter and a columnist for the Current Newspapers. First, the most important things in the news, how was your vacation?

12:07:09

MR. TOM SHERWOODIt was terrific. I went to a great city. It had lots of things for tourists to do and it was amazing how much you can do in Washington when you're not working.

12:07:18

NNAMDIOh, that's the scene.

12:07:19

SHERWOODDid I tell you I went to the Library of Congress, to the Map Room, which is in the Marshall -- I can't remember the name.

12:07:23

NNAMDINo, you did not.

12:07:24

SHERWOODI went down in the basement and I told the guy I wanted to see some maps. And he said, well, we only -- which ones do you want? We have 5.5 million of them.

12:07:32

NNAMDIWow.

12:07:33

SHERWOODAnd they have 85,000 -- anyway, I looked at maps of the District of Columbia from the early 1900s.

12:07:39

NNAMDIAnd I have news for you. This past week we did a show on tattoos. And so I have now…

12:07:44

SHERWOODPerfect.

12:07:44

NNAMDII've now got a tattoo artist who's ready to put the D.C. flag tattoo on you whenever the occasion arises.

12:07:50

SHERWOODWell, I think if someone would donate $3,000 to WAMU's radio station, the best in the region, I will get that little tattoo.

12:07:58

NNAMDIWe'll be working on it. Now, to the other news at hand, during the course of this past week, to no one's surprise, Mayor Vincent Gray vetoed the LRAA, the Large Retailer Accountability Act, saying that it was a job killer in the District of Columbia. It would have caused for a minimum wage of $12.50 per hour for large retailers whose size, I guess, expanded beyond a certain range. And he said he would prefer to look into legislation raising the minimum wage, but he would not be specific about that.

12:08:34

SHERWOODWell, the $12.50 an hour includes wages and benefits. So it's not quite that per hour.

12:08:39

NNAMDICorrect.

12:08:39

SHERWOODYou know, when the council passed this on an 8 to 5 vote on July 10th, I reported that day that sources say Mayor Gray is going to veto this bill as a job killer. And of course it took him many weeks to get around…

12:08:52

NNAMDITo get the bill, first.

12:08:54

SHERWOOD…to where I was. Well, yes. That was done by Council Chairman Phil Mendelson. But this was important. This is kind of the tip of the spear of a larger story playing out across the nation in raising the minimum wage. California, just this week, is agreeing to raise the minimum wage to $10 an hour between now and 2016. Clearly, the mayor and the people who voted to allow Wal-Mart to come here are going to also support a larger minimum wage in the District of Columbia.

12:09:26

SHERWOODAnd the council vote on Tuesday whether to override the mayor's veto or not, it passed 8 to 5. You need nine votes to override the veto. As of this moment, there are not nine votes to override the mayor's veto. Wal-Mart's already talking about going forward to have two stores, one on Georgia Avenue, one on New Jersey Avenue, open in time for Black Friday.

12:09:49

NNAMDIAnd talking about overturning the veto, there has been some talk that there is a possibility that at-large Independent member David Catania may change his vote, if indeed he can get something else in response to that. But I have a sneaking suspicion that there are members of this council who may have voted for this bill with the expectation that it would be vetoed.

12:10:12

SHERWOODWell, there are some people. Jack Evans has openly said, you know, he traded his vote for -- on the Wal-Mart bill, voting in favor of the minimum wage measure and some measures in the budget that were desperately needed. And David Catania has suggested he's trying to get some education reforms done. And he wants the mayor to support him on that or he won't' support the mayor on the Wal-Mart bill. But there's been no indication that any of the five people who voted against the Wal-Mart bill will switch sides now and support the veto override.

12:10:47

SHERWOODThere's a lot of talk. Anita Bonds might want to switch from opposing Wal-Mart to supporting it because of the jobs needed to cross the river. There's a lot of machination going on between now and Tuesday. As of this moment, it looks like we might get the same vote that we had when it passed.

12:11:04

NNAMDIAnd an investigation by the U.S. attorney into the Vincent Gray campaign for mayor of 2010, involving a shadow campaign with $653,000 allegedly provided by businessman Jeffrey Thompson, has now expanded nationally, exponentially, if you will, to include the campaign of former Secretary of State Hillary Rodham Clinton. Allegations that Mr. Thompson provided money for that campaign for events or organization strategy as far as away as Illinois and Texas.

12:11:38

SHERWOODYes. We've known some time now, for the last decade, Jeffrey Thompson, through a variety of means, was providing money to candidates for -- whether it's the, uh, Virgin Island congresswoman or candidates in Maryland and other places, in Virginia and, of course, this famous shadow campaign for the District. Now, from the 2008 campaign, prosecutors have kind of laid out the scheme by which he allegedly provided $600,000 for street workers in four states, Texas, Pennsylvania, Tennessee and North -- I can't remember all four.

12:12:12

SHERWOODBut the point being, this, again, just shows the breath of Jeffrey Thompson's working his way into the world of politics across the nation.

12:12:21

NNAMDIAnd for people who say, but what does this have to do with the original intent of this investigation, the Gray campaign? Are we going too far afield here? Is this going to end up like White Water?

12:12:29

SHERWOODNo. I think this is all part -- if you think of a jigsaw puzzle with various colors, I mean, they're putting all the colors together. This all started with Sulaimon Brown saying he was paid to attack Adrian Fenty. That was the key that opened the door to this vast treasure chest of Jeffrey Thompson, in where he spent this money in lots of ways.

12:12:47

SHERWOODNow, the Hillary Clinton -- it's pretty clear from prosecutors and people around her that it's not something she knew about, although some senior campaign people maybe did. To bring it back locally, some of the mayor's people are saying now, oh, well, this shows that Mayor Gray was a victim of Jeffrey Thompson, not a beneficiary, because he was doing this was Hillary Clinton and other people. He was doing this and the mayor didn't know anything about it.

12:13:12

SHERWOODWell, the only difference in this is, is that Jeffrey Thompson, the shadow campaign for the mayor was run out of the mayor's campaign office. And the Hillary Clinton thing was done kind of out in the hinterlands of the campaign in the national campaign. So this is not a free pass, apparently, for Vince Gray's investigation, but it does show the breadth of which this businessman Jeffrey Thompson was trying to be a big man on campus.

12:13:34

NNAMDITom Sherwood. He is our resident analyst. He's an NBC 4 reporter and a columnist for the Current Newspapers. You're listening to "The Politics Hour." Joining us now in studio is Stephen Cordi, deputy chief financial officer for the District of Columbia's Office of Tax and Revenue. Stephen Cordi, thank you for joining us.

12:13:52

MR. STEPHEN CORDIKojo, it's a pleasure to be here.

12:13:53

NNAMDIThe Washington Post just ran a series this week about a system that allowed your office to bring in delinquent property taxes. A system, the newspaper said, that was also abused by those who sought to profit from it, causing vulnerable residents, some of them, to lose their homes. You've also criticized the series for portraying the issue as if it were happening today, when you believe that this is a problem the city has largely put in the past. Can you explain?

12:14:19

CORDIYes. Thank you for the opportunity to do so. The Post articles as though the problem were continuing today and nothing could be further from the truth. We no longer sell properties for a few hundred dollars. When I became head of the office in 2008, one of the first things I did with Dr. Gandhi's personal approval, was to put in $1000 threshold to prevent sales of less than that. And the Post, despite ten months of looking, found no sale since 2008 where anyone's property was sold for a few hundred dollars.

12:14:53

NNAMDI800-433-8850 is the number to call if you'd like to join this conversation. What do you think -- what do you make of the idea of the D.C. tax office selling liens on homes to investors? 800-433-8850. Do you think it's a good idea or a bad idea? You can also send email to Kojo@wamu.org. According to the Post, in 2011 the office auctioned home liens, as small as $569.

12:15:22

CORDII was aware of that allegation. Property did not go to foreclosure. And our $1000 threshold, which has been both higher and a little bit lower, over that period of time -- there have been some sales at less than $1000. But there have been nothing for a few hundred dollars.

12:15:42

NNAMDISo, if you pardon me, $569 does seem like a few hundred dollars.

12:15:51

CORDIWell, they found that one sale, you know, our position is that…

12:15:56

SHERWOODWas that mistake or just that it worked out? I know this is -- Lord knows, anyone who's been to the foreclosure auction, it is very complicated. And we don't want to get too lost in the weeds. But I spoke to some housing activists who were actually on Kojo's show this week after the story broke. And Jack Evans, the council member from Ward 2, chairman of the financial revenue committee, wants to raise the minimum threshold, not from $1000, where you put it, but to $2000.

12:16:24

SHERWOODAnd I'm sorry, I don't remember her name, she said, if you have a $200,000 property and you lose it for $2000 tax liability, that's still an imbalance. And I'm just wondering what does your office -- do you personally recognize that some ordinary individuals have been terribly harmed by this system, even if you follow the direct letter of the law? And do you see the unfairness of it and should more be done to protect the most vulnerable people?

12:16:53

CORDII would agree with you, Tom, on that. Which is, of course, one of the reasons why we moved to raise our threshold because of, agreed, unfortunate cases and some of which the Post described. And true, your house shouldn't -- you shouldn't lose your house for a small amount of dollars and we have taken steps to prevent that from happening. You know we're working with the council on improvements to the tax sale system. One is…

12:17:20

SHERWOODThey're going to act on Tuesday, with -- Jack Evans has several proposals. I think David Grosso has asked for a moratorium of some type. Anita Bonds has asked for some type of moratorium. The mayor has said he'll make some proposals, although, I don't know that he has in fact done that yet. What do you see happening on Tuesday that will kind of put maybe a brake on all of this so that you don't let tax cheats go forward, but you get some of the more innocent victims, give them a little more breathing room while you figure all of this out? What could happen Tuesday?

12:17:53

CORDIWell, I mean, we expect and we've seen a number of bills that would be introduced, many of them, the impact would not be felt until next year's tax sale, but we know Mr. Evans is considering some relief for taxpayers who purchased things at more recent tax sales. The decision on a threshold, it can certainly be made by council. And I know they're also looking at limits on legal fees, which has been an issue in some of the case. And that, again, is a decision for the council and not one that OTR can make.

12:18:24

NNAMDIWhat we have not asked you to explain -- and I apologize for that -- is what exactly is the process and system right now in place?

12:18:31

SHERWOODDo we have two hours?

12:18:32

NNAMDINo, no. He can do it in a short period of time.

12:18:36

CORDIWell, the present system is that if you do not pay your taxes in one year, by the middle of the following year we will start sending you notices that say you need to pay your taxes or your tax lien will be offered for sale. And those tax liens are sold ultimately, if you don't respond to the seven notices that we send every taxpayer, they will be sold to tax sale purchasers, who then obtain…

12:19:01

NNAMDIIf it is more than $1000, currently.

12:19:04

CORDIRight. More than $1000 in the last several years. The tax liens will be sold to tax sale purchasers who then have the right to collect the money and earn the interest on it during that period of time. If the properties -- if the taxpayer doesn't pay, ultimately the property can be foreclosed upon and the tax sale purchaser can obtain title. Typically, over the years, about 3 percent of the properties that are sold at the tax sale are foreclosed upon. 97 percent of the time the taxpayers pay the back taxes and the technical term is redeem their property.

12:19:45

SHERWOODIn those 3 percent, are they the poor, the elderly, the veteran? Who are those 3 percent or are they tax cheats who tried to game the system and then ultimately lose or are they the victims of a complicated system where legal fees pile up, even as you try to struggle to pay the tax bill itself?

12:20:09

CORDIWell, they could be all sorts of people, you know, including the poor. For the most part, they're people who've made a decision that the property isn't worth paying a lot of money to obtain. It is underwater property, and that the smartest thing to do is not to throw good money after bad and just let it go. Now, that is not every case, but it is many cases.

12:20:36

NNAMDIYou are dealing with a system that you inherited, even though you have made what, in your view, are certain fixes to the system. Tom might be able to help me with this, because there are people who feel that the fundamental problem is the entire process of outsourcing the repayment of these liens because there are other jurisdictions that make those collections themselves. And, Tom, as I said, you might be able to help me with this, ultimately, isn't it the responsibility of the city's legislative body to decide whether or not these liens should be outsourced, the way they are?

12:21:09

SHERWOODWell, the CFO is an independent office, but as I understand it, and Robert King, a former tax official in the '80s noted in a letter to the editor to the Post today, that in the past the tax office, if it found a de minimis amount of money -- and we're talking about thousands upon thousands, maybe a few hundred or a few thousand is de minimis -- they would refer those to nonprofit housing organizations to investigate, to see what's happening there. And so you could minimize the people who become victims of the tax system.

12:21:42

SHERWOODWhy do we let the people who get the tax liens, run up tax bills, I mean legal fees on top of the tax bills, and it puts the homeowner in an impossible situation, even a well-intending homeowner?

12:21:58

CORDIThe tax sale process is used in about 29 states across the country for recovering property taxes. In most of the other jurisdictions the jurisdictions collect the taxes directly, but at the end of the day the ultimate collection method is to sell the property, whether it's done by the jurisdiction directly or it's done through third parties, ultimately it's the same remedy.

12:22:33

NNAMDICan you explain why, if I buy a lien on a property for $5000, how is it that I not only can foreclose on the property, but that I also somehow get the equity to that property that really was put in by the homeowner?

12:22:50

CORDIThe process is sort as you described a second ago. It's a foreclosure process that ultimately, if you don't pay the tax sale purchaser acquires a tax deed for the property upon the payment of all the taxes that are due upon it. And yes, he does acquire the equity to the property.

12:23:11

SHERWOODThe only safeguard that I can see on this, because at this time the person who's spending legal fees in order to acquire the property -- can assess the owner, the original owner of the property, these fees, which adds to their burden and makes it more likely that they'll default. But if you foreclose on my home and someone buys it at a tax lien sale, at auction, I still have a -- what? Is it six months period of time to clear that, pay all the legal fees, pay the back taxes, pay the interest and I can get the home back? Is it six months or is it 60 days? I can't remember.

12:23:47

CORDIIt's actually a period of multiple years that you would have to pay off, but from the point at which the tax lien is sold at the tax sale, typically…

12:23:59

SHERWOODWhen the hammer goes down, my property's sold?

12:24:02

CORDIThe right to the tax lien is sold. The property isn't sold yet.

12:24:04

SHERWOODRight. Talking to the right department.

12:24:05

CORDIYou may not move to foreclose for six months. So during that six-month period of time, with essentially no fees or minimal fees, the homeowner can redeem the property. Redeem is the technical term.

12:24:20

SHERWOODNot legal fees at that point?

12:24:22

CORDINo. There's a title search fee that's in there, that if there's -- after four months, if the purchaser incurs title search fees, which he must incur in order to foreclose, you could be -- that fee can be $300 and some. But beyond that, no. Now, once the lawsuit is filed, you have a foreclosure suit, those typically take years before the foreclosure…

12:24:51

SHERWOODAnd that's when the legal fees run up?

12:24:52

CORDILegal fees can then start once the suit is filed. But during that two-year period of time, the homeowner -- until the gavel comes down from the judge saying it is foreclosed upon, at any moment, the homeowner can -- the property owner can foreclose.

12:25:08

NNAMDIIn case you're just joining us, our guest is Stephen Cordi, deputy chief financial officer for the District of Columbia's Office of Tax and Revenue. He joins Tom Sherwood, our resident analyst. He's an NBC 4 reporter and a columnist for the Current Newspapers. We're taking your calls at 800-433-8850. You can send email to Kojo@wamu.org. When you came into this position, according to reports in the Washington Post, the error rates were around, oh, 20 percent that were being made by the Office of Tax Revenue.

12:25:39

NNAMDIIt would appear that you have gotten them down to about 7 percent. In nearby jurisdictions it's as low as 1 percent. Why is our -- why was our error rate so high? What does it take to get it down?

12:25:51

CORDIWell, I should say that for the current year it's running about 3 percent. The error rate is simply a measure of the number of properties that were sold that had already been paid by the taxpayer. The District cannot receive payments directly. So in order to pay your real property taxes you have to go to a Wells Fargo Bank and pay them. And it invariably happens that it is several days before we find out about a payment.

12:26:28

CORDIWe also -- payments have to go -- we cannot touch the money. It has to go through a lockbox, hired by the bank, and keyed and provided to us in file. And finally, we recognize the mailbox rule. So you can drop your payment in the mail moments before the tax sale and it is an on-time payment. We don't find out about it for 10 days. So we have taken steps -- now, we don't want to cut down on the ways you can pay us. I think that's not fair to the taxpayers, you know.

12:26:59

CORDISo if you're Montgomery County you can say, look, the only way you can pay is walk up to our counter. We don't want to do that, and we couldn't do that. But we have taken now to sending notices to taxpayers right before the tax sale to say, hey, look, if you pay us be sure to fax a copy to this fax number or just send an email with a copy of your receipt so we -- and so that procedure has dramatically reduced the number of properties that are sold.

12:27:29

SHERWOODBut even that, even giving the good intentions of that, again the Post pulled the heart string to people -- the person who has dementia and goes into a home and the -- now the family members say, well, they didn't know. Of course he -- but you send these notices -- do you send these registered notices or are they just mailed like a solicitation for auto insurance? Are they…

12:27:52

CORDIThe notices are, as required by law, are mailed to the premise address or the last known address of the taxpayer.

12:27:59

SHERWOODRegular mail, not…

12:28:00

CORDIRegular mail.

12:28:01

SHERWOODToo expensive to do registered mail?

12:28:03

12:28:07

SHERWOODCertified. Excuse me, certified mail.

12:28:10

CORDICertified mail, we do not use certified mail. You know, if you're -- people who -- it's not a very effective way. It's an effective way to prove you mailed something, but it's not a very effective way to notify anybody anything because people who owe money know that they're not to sign for certified mail.

12:28:34

SHERWOODI know that in the spring of 2012, last year, the CFO's office, your office, moved to update and bring in a new system to keep better track of property tax records. And I'm going to mention the name, the firm was Thompson, Bizilio, Cobb, Bizilio, which is all mixed up in this scandal stuff. When that all broke, you guys broke off that contract, but what is the status of -- I don't think it was ever actually let. But what is the status now of what you're doing to make sure your modernize your records are in fact, with the square lot numbers and all those things match up with the right owners of all these things that can also be minimized?

12:29:12

CORDIYeah, well, your summary of our previous procurement is absolutely correct. We got to the point that we'd be ready to award a contract and pulled it back.

12:29:22

SHERWOODWe dodged a bullet with that one, by not going to Thompson, Bizilio, Cobb, Bizilio, but go ahead.

12:29:26

CORDIAnd…

12:29:27

SHERWOODSo where are we now?

12:29:28

CORDISo that was a contract to improve our real property process, which involves three separate items, our assessment process, our recorder of deeds and our tax billing. So we backed up and we have let contracts to upgrade our assessment process. That's under way. We've let contracts to upgrade the recorder of deeds process. And we have a procurement to upgrade the remainder of our tax systems. And so that the last piece that still remains to be done, which is the billing system.

12:30:09

NNAMDIOnto the telephones. Gentlemen, please don your headphones so you can hear our listeners. We will start with Janice, who is in Manassas, Va. Janice, you are on the air. Go ahead, please.

12:30:19

JANICEThank you. And I hope I'm clear and not too insulting, but I cannot believe how inept the tax system is in D.C. We own property in D.C. And we have a parking space that goes with our condo. And my husband has been on the phone and with documents and faxes for a year trying to get things straightened out. What has happened is they were taxing us for a different space.

12:30:43

JANICEAnd we pay taxes -- now we pay taxes on two parking spaces because what has happened is we got a note, which just came through like a regular bill, and it said, if you do not pay taxes -- on one line on the bottom -- on this space we are going to sell it to, like, the tax lien thing. And the recorder of deeds hasn't gotten it straightened out yet because my husband called that guy. And then the guy had to admit he made a mistake because my husband has…

12:31:05

NNAMDIWell…

12:31:06

JANICEOh, it's driving me crazy. I'm so outraged.

12:31:09

NNAMDIWell, Janice, the space that's being threatened to be sold is the space you already own and not the space that they think you own?

12:31:16

JANICERight. And so we've ended up paying taxes on…

12:31:19

NNAMDII can tell you right now that Stephen Cordi will not be able to solve that specific individual problem for you sitting in this office.

12:31:25

CORDIMaybe I can get her name off the air and give it to them.

12:31:27

NNAMDII'm going to put you on hold, Janice, so that you can get your name off the -- so that we can take your name and maybe somebody in his office can deal with that. But I'm interested in calls that have more general problems. So here is Melissa, in Washington, D.C. Melissa, you're on the air. Go ahead, please.

12:31:45

MELISSAHi. I thank you guys for having me. First of all, like a fact check, the only thing that's underwater is in D.C. is the boat that sank a few weeks ago. Our properties are not underwater. That's not how our housing crisis works.

12:31:54

NNAMDIOkay.

12:31:56

MELISSASecondly, I was wondering if anybody from from -- of Tax Revenue stood by and watched a family when they got evicted from their homes. I think I (unintelligible) I've used my body to help prevent evictions. And when you actually see a family have all of their possessions thrown on the -- D.C. is the only area that (unintelligible) evictions.

12:32:12

NNAMDIOnce -- you raise an interesting question. Once the office of Tax and Revenue sells the lien, Stephen Cordi, then you have washed your hands of the entire matter, so to speak?

12:32:23

CORDINot entirely, but in fact all the proceedings that take place after that are between the tax sale purchaser and the property owner within the Superior Court. We are involved in the process of receiving payments.

12:32:41

NNAMDISo if there's a foreclosure you have nothing to do with that?

12:32:44

CORDINo. We're not -- no.

12:32:45

SHERWOODI think the two callers, the person with the double space parking tax bill, the person here, who's an activist, who tries to help people who are being foreclosed upon, address the emotion. I think what people worry about is that you're the cold-hearted, jacket-and-tie official who's following the law. The law says do this, you do that, and you don't see the heart and soul of the effect of your policies, enough to make sure that you run herd on your staff, that these things don't happen, if at all possible. Are you hemmed in by the law or are you hemmed in by your attitude?

12:33:23

CORDIWell, as I mentioned at the top of the program, we have some discretion. And I personally, have exercised that discretion to prohibit the sale of low-dollar tax properties. You know, I mean the Washington Post chose not to report on that, but, in fact, it's something that we could do and we did do and we have done. At the end of the day it is the council that enacts the laws for the District of Columbia and it is not for city employees to write their own laws.

12:34:01

NNAMDIWell, former council member Bill Lightfoot put it another way. He said, all the people in that office are interested in doing is collecting the money. Do you see that as your primary and sole responsibility?

12:34:16

CORDIIt's our responsibility to see that laws are administered correctly and fairly, and that the revenues that are due the District are collected and turned over to the city treasury.

12:34:30

SHERWOODWell, the CFO make proposals on Tuesday or are you in the process to do that? CFO being Nat Gandhi. I mean, I think Mr. Lightfoot has called on Mr. Gandhi to resign after a variety of issues that have come up for some time now, but will Mr. Gandhi -- I don't think he wasn't even quoted in that article. I think you bore the brunt of all the articles. Is he going to make proposals on Tuesday?

12:34:53

CORDIDr. Gandhi personally, and a number of his staff have been working with the mayor and with multiple members of the council to consider reform proposals to help draft legislation, things that will be introduced on -- not everything, but things that will be introduced on Tuesday, we participated in drafting. And we're trying to support the efforts of the mayor and council members in making changes.

12:35:25

NNAMDICan we talk about…

12:35:26

SHERWOODI want, you know -- can I say one more thing?

12:35:27

NNAMDISure.

12:35:27

SHERWOODBecause I know his background, for people who don't know Mr. Cordi, I mean, he comes from Maryland. He worked in the Maryland State Tax Offices forever. You worked with Louis Goldstein, Governor Schaffer. You have a long history in Maryland. I don't remember, in the time I've been around, lots of tax issue problems there. Do you wish you'd never retired from the Maryland Tax Office, comptroller's offices?

12:35:50

NNAMDIWhat's the problem here? Yes.

12:35:54

CORDIWell, of course, one thing is that in Maryland I was with the State Comptroller's Office, which did not administer property taxes.

12:36:03

SHERWOODThere you go. There's the answer.

12:36:06

NNAMDIBut let's talk a little bit -- because we're running out of time, about the auctions themselves. The Post, again quoting here, says, "In 2007 there were more than 150 purchasers who spent five days competing for 2000 liens. When it was over, just six companies had swept the bidding." I read that to be 2000 liens, six companies. Are there safeguards that are currently in place or that you can or should put in place to keep people from rigging these auctions?

12:36:35

CORDIWell, I can tell you that the -- once again, this is years ago. I mean, we've looked at the evidence the Post provided us. It was not very convincing evidence. And you must understand, the nature of the D.C. tax sale is very different than other states. The bidders are bidding on a surplus, which we hand back to them in its entirety. And so in point of fact, the District is not at risk really at all, as the government and the amount of money that you pay as a surplus, does not affect the amount of money that a homeowner has to pay to redeem his property by even a penny.

12:37:15

CORDIAnd so we don't believe -- we saw no evidence of it. We see no incentive for it. If it had happened, the District would have lost no money and nor would the homeowners have been harmed by it. And it would be a surprise to no one that the people who come to the tax sales with the most money buy the most properties. One last point, Kojo. And that is the Post study assumed that the tax sale properties are happening randomly. They are not. They are -- we call them in order, square and lot order. And it starts over in the western part of the city and works to the eastern part of the city.

12:37:52

CORDIAll of the best properties, the most expensive properties, sell in the first day. And that's where all the big bidders are. And it should be a surprise to no one that the large bidders buy those properties.

12:38:06

12:38:11

ALHi. Good afternoon, gentlemen. What I'm about to tell you, it's experience of me personally in the tax office in 2004, which I believe that the gentleman, Mr. Stephen said that from 2008 and forward, nothing like that happened, but, you know, all of this is good. But the procedure, I believe (unintelligible) to the people for the purpose of selling taxes, the lien taxes. That kind of thing, I don't think that's hardly changed.

12:38:47

NNAMDIOkay. Well, as you said, it happened in 2004. And we're running out of time very quickly. I wanted to get one more call in because Bob, in Washington, D.C. says, "The system is flawed." In what way is the system flawed, Bob?

12:39:00

BOBWell, I think your guest, Kojo, is disgraceful apologist for a flawed system. The tax office has a long history of scandalous behavior and incompetence. He is like a killer who hasn't murdered for three years and…

12:39:13

NNAMDIWell, allow me to repeat my question, Bob. In what way do you think the system is flawed?

12:39:18

BOBWell, didn't he say he put a $1000 limit on liens and then you pointed out that some liens have been issued for $500?

12:39:27

NNAMDIThat may have been a mistake, but I guess a valid question to ask Stephen Cordi. Do you think $1000 is sufficient? Shouldn't it be higher than that before someone is allowed to buy a...

12:39:40

SHERWOODKnowing that that's a council and mayor decision, but what your professional advice to the council and the mayor?

12:39:47

CORDIThe limit that OTR set up, $1000, back in 2008, you know, was set to avoid selling low-dollar properties because we were, in effect, losing money on those properties because it cost us more to handle them than we were making on them. And while it had the effect, and, frankly, intended effect, of helping out people with small debts, to go beyond an amount that there is an administrator's fee, that's a council decision.

12:40:19

SHERWOODBut what you're seeing and hearing the motion, knowing the facts better than probably anyone, is 2,000, is 3,000, is 5,000 good, just to add--it may be even just a long process like six months, some stop gap things. Or maybe the housing activist, maybe the family members can be alerted. Maybe something can happen where a person who has great wealth for them invested in a home don't lose it because of the complexity of this system.

12:40:48

SHERWOODSomething more than one, maybe two, maybe five, who knows? Is there a figure, as you as a pro, could suggest the council and the mayor consider, even if you don't endorse it yourself?

12:40:58

CORDIWell, I mean, this is largely -- at this point, once you get to those levels, it's really a political decision and not a decision for tax collectors to be making. There is a cost as the thing goes up, and then there's the problem that, if you let it rise, you almost guarantee the person will lose their home as the amount that they owe gets higher and higher and higher, which would be an unfortunate consequence.

12:41:21

SHERWOODWhat is -- is there a specific interest rate that's involved here that if you don't pay, is there -- what percentage is the interest rate we charge -- the city charges?

12:41:29

12:41:35

NNAMDIStephen Cordi is deputy chief financial officer for the District of Columbia's Office of Tax and Revenue. Thank you so very much for joining us.

12:41:42

CORDIThank you, Kojo.

12:41:43

NNAMDITom Sherwood is our resident analyst. He's an NBC 4 reporter and a columnist for the Current Newspapers. I mentioned to Tom earlier that I saw a tweet on my Twitter page that Ward 3 Councilmember Mary Cheh will be offering a bill to compensate victims of unfair tax lien sales. I guess that's a story that we will be following...

12:42:03

SHERWOODWe'll have to find out what, you know, what's the threshold for that. I mean, at what point and whose fault it is and if there -- you get into a real mix when you start figuring out who just, you know, make everyone whole.

12:42:12

NNAMDIExactly right. So we'll, as I said, be following that. You know Virginia politics. And now it would appear that in the race for governor, there was a major Republican strategist, Boyd Marcus, who threw his support behind the Democratic candidate Terry McAuliffe. And that shocked political observers because he was an adviser to former governors, like James Gilmore and George Allen.

12:42:40

NNAMDIAnd now there are reports that a Democratic strategist or activist known as Mudcat Saunders has been backing Virginia attorney general, the Republican, Ken Cuccinelli in the (unintelligible).

12:42:51

SHERWOODWell, how could you go against anyone named Mudcat?

12:42:53

NNAMDIExactly.

12:42:54

SHERWOODI mean, I'm -- oh, actually, I think I've met him. But these are the shifts in -- of what's happening in the political state that's getting national attention. I mean, there are some people -- I exchanged messages with the University of Virginia's Larry Sabato. And there's a very strong feeling that the Democrats are going to win all three races statewide, which would be extraordinary given the purple nature of the state at best, if not more conservative.

12:43:24

SHERWOODAnd so you see Boyd Marcus, who is a Republican, a long time, a veteran -- decades of Virginia Republican politics, you know, had supported Lt. Gov. Bill Bolling to be the governor -- gubernatorial candidate. Cuccinelli jumped in front of that. And I think there's no love lost there. But I think what you're going to see a lot of funny little things happen between now and November. And this week, the big news was not these people switching allegiances but that Cuccinelli shook up his staff.

12:43:52

NNAMDIEighteen thousand dollars.

12:43:53

SHERWOODShould -- no, no, that was one thing. He...

12:43:55

NNAMDIHe paid $18,000 to a nonprofit for...

12:43:56

SHERWOODI wonder if he's going to take a tax deduction for his $18,000. But the big issue was that his Springfield office, they shook up the staff. The headquarter staff, they started rearranging -- some would say deck chairs, some would say desks -- to focus on what they're going to do between now and November. There's a big debate in Fairfax County on -- I think it's Sept. 26, which NBC 4 is the sponsor of with the Fairfax County, I think, Chamber of Commerce.

12:44:20

SHERWOODThe Cuccinelli campaign -- I mean, if you talk to the Republicans -- are really worried now that they've got to really right the ship before they get into the final days of the election. That's what the news is, rather than the staff people moving back and forth.

12:44:33

NNAMDIWe'll be keeping our eye on the governor's race in the Commonwealth of Virginia. But we move on now to Montgomery County. Joining us in studio is George Leventhal. He's a member of the Montgomery County council. He's a democrat who holds an at-large seat. George Leventhal, thank you for joining us.

12:44:47

MR. GEORGE LEVENTHALHow are you? Nice to be here.

12:44:49

NNAMDIMontgomery County's generally a place with a progressive reputation, a welcoming reputation. With that in mind, this week, the county launched an initiative to discourage motorists from giving money to panhandlers. Why do you feel this is necessary?

12:45:04

LEVENTHALIt is commonsense that if motorists did not give to panhandlers, panhandlers would not find it lucrative to stand on the median or in the roadway or in public places and beg. Now, we are a compassionate county. And we are encouraging our residents to give. We're encouraging them not to give to panhandlers. And so what we've done is we've made it very easy for residents to give directly to charities that help those who need the most help, such as Catholic Charities, Interfaith Works, Montgomery County Coalition for the Homeless, Bethesda Cares, Shepherd's Table, and others.

12:45:42

LEVENTHALWith one simple text message, the word share to the phone number 80077, the fund for the most needy people will benefit with a $5 contribution. And so if you are -- if you feel it's virtuous, as we all do, to help the needy. Rather than responding when a beggar solicits from you on the roadway or in a public place, you can respond by sending this text message -- not while you're driving. But we're providing the information. And then $5 automatically will benefit those who need the most help.

12:46:15

SHERWOODI was talking to some people about your proposal to encourage people not to give money on the streets, whether they're driving or walking on the sidewalk. And I got this kind of cold, sneering -- well, a lot of them or most of them are fakes anyway, that, you know, they don't really -- really aren't beggars. They're just getting money, and they're not desperate.

12:46:33

SHERWOODDo you have any sense of, A, how many people are panhandling in any given week or month or period of time in Montgomery County? And, B, are they people in real desperate need, as some are obviously? But are there some fakes out there? Which would be another reason not to give to someone if he or she were faking. We have this, you know, people with a child, and the mother might come walking up. And you think, well, they need help. And that's what they do. That's her job. So how many fakes are there?

12:47:00

LEVENTHALTom, in Montgomery County, there have been two surveys, since I've been on the county council, of the panhandling population. It's a difficult population to study. It is -- and it's not clear whether -- if an individual says, for example, I am not a drug addict, whether that person is a drug addict. So there have been academic studies done on this topic.

12:47:23

LEVENTHALWe know that not all homeless people panhandle. We know that for certain. We know that not all panhandlers are homeless. However, many panhandlers represent themselves as being homeless. And so what this campaign does is provide funds directly to organizations that benefit the homeless. I don't claim that you're going to help that specific individual who approached you with a coffee cup asking for spare change. We don't have the wherewithal to do that to...

12:47:47

NNAMDIHow about those panhandlers who, because of a variety of issues, including mental health issues, are wary, sometimes afraid, but just don't like dealing with even the nonprofit organizations that you are recommending that people make those contributions to? Some of those people are panhandlers.

12:48:04

LEVENTHALYou know, it's a fascinating issue. It's a fascinating topic. People, as Tom says, have an emotional reaction, sometimes an angry reaction. I'm hearing that. There's no question that you have clients who will not accept help. In the case of people who are addicted, obviously people want to continue their addiction. They don't seek to stop using the substance. So it is the case. And we are also doing direct outreach to these clients. If they are not residents of Montgomery County, they're not eligible for help in Montgomery County. But...

12:48:35

SHERWOODYou're not shooing them to the District or other places, are you? You're not trying to shoo them out of the county? You're trying to get them help.

12:48:39

LEVENTHALWell, let's be clear. I -- we need to be very clear about what we are doing and what we are not doing. We are not at this time seeking new laws. We are not at this time asking the police to harass panhandlers. These are things some of my constituents say we should do. Others of my constituents say, you know, these are virtuous individuals, and the Bible tells us to help the poor. So I hear the range of opinion. What we are doing is we are encouraging our constituents to give to charitable organizations that provide help to people in real need and not to give to panhandlers.

12:49:09

NNAMDIWell, I'd like to get Ryan in on this conversation 'cause you just made a point that Ryan wants to address. So put your headphones on, please. And, Ryan in Kensington, Md., has Councilmember George Leventhal addressed effectively the question you were about to ask?

12:49:24

RYANPartly. I have contacted my particular representative in the county council, I grew up who's Nancy Navarro, on this issue. And my personal feeling on this is that the majority of the people who are out here are actually predators. And they're preying on people's compassion and their willingness to give and their sensitivity. And the majority of them are, in fact, not actually homeless.

12:49:51

SHERWOODWhy do you think that? Why do you think...

12:49:52

RYANWhy do...

12:49:53

SHERWOODWhy do you think they're not homeless?

12:49:55

RYANBecause of the other places. I have heard from a friend of mine, who lives in Frederick County where it has been made illegal, that they actually come from Frederick County down to Montgomery County to panhandle because it's still legal here.

12:50:08

LEVENTHALWell, Ryan, let me ask you this. So I would imagine you would support the message that Montgomery County's promulgating now that motorists or others should not give to these individuals. And I certainly assume that you agree that individuals should give to charities that help the needy. So it sounds like you views are consistent with those that the county is promoting right now.

12:50:27

NNAMDIRyan actually would like it to be illegal.

12:50:28

RYANWell...

12:50:29

NNAMDIRyan?

12:50:30

RYANSort of, yes. I'd like to go a little bit of a step further because they're on every corner. Okay? This isn't about actually -- it's not that I have a feeling or any kind of opposition against the poor. I personally don't have a, you know, a dog in this fight. You know, I don't know anybody who is actually homeless. I think that it's -- I think that these people are just preying on people who aren't strong enough to stand up and say something.

12:50:50

NNAMDIAnd, Ryan, you feel that this panhandling should be illegal, correct?

12:50:55

RYANI feel like there's something more...

12:50:56

NNAMDIWhy do you not feel it should be illegal, George Leventhal?

12:50:59

LEVENTHALSo a few weeks ago in Michigan, a federal judge overthrew a Michigan ordinance banning peaceful panhandling and saying -- the federal judge in this will be a precedent throughout the United States -- that begging is First Amendment protected speech. We have different laws affecting different jurisdictions in Maryland as to whether soliciting in the roadway or in the median is legal or illegal.

12:51:22

LEVENTHALBut even in those jurisdictions, including Prince George's County, that have made it illegal, panhandling continues. There are lots of laws, for example, no texting while driving. But people still text while driving. So in my judgment, it is commonsense and good public policy to urge the public not to give to panhandlers but to give to charity.

12:51:37

NNAMDIWell, before you go any farther, here's one of the reasons it's complicated. This comes from Burt in Wheaton, Md. Burt, your question or comment, please.

12:51:47

BURTYeah. Hi. Good afternoon. I have a problem with the Fill the Boots campaign that the fire department has. They are at every corner. You have to, like, acknowledge each fireman when they come to your window. And I know it only happens, I don't -- maybe once a year, twice a year. But (unintelligible)...

12:52:11

NNAMDIBut I think -- but that's one of the complications of making it illegal, is it not, George Leventhal?

12:52:16

LEVENTHALI agree that walking in the roadway is unsafe, no matter who is walking in the roadway. I absolutely agree with that. The governance of state roads, which is where all of this activity takes place, is up to the Maryland State legislature. It's not up to the Montgomery County council. So what Montgomery County government is doing is urging the public not to give to panhandlers but to give to charity. Now, one difference between what the firefighters do...

12:52:41

SHERWOODWould you say don't give to the fire -- I'm sorry. You're about to answer the...

12:52:43

LEVENTHALRight. So one difference between what the firefighters do and what an individual beggar does is that when a firefighter says that the money he's soliciting goes to the Muscular Dystrophy Association, you can reasonably believe it is going to the Muscular Dystrophy Association.

12:52:55

SHERWOODAnd that (unintelligible)...

12:52:55

LEVENTHALHaving said that, I think walking in the roadway is dangerous and should be discouraged under any circumstances.

12:53:01

SHERWOODThat sounds like you buy into the idea that all the people are faking, like the man from Frederick just said. But let me ask a question. If a person is standing outside a subway and says, I'm hungry, should you buy that person a sandwich or not?

12:53:14

LEVENTHALSo in -- now, this is anecdotal, and so a lot of what you hear is anecdote. In my experience, when an individual's asking for cash, when you give that individual or that client food, that's not what he individual wants, and food often ends up in the trash. But that's anecdotal from my own experience. And in my own experience and talking with clients -- I've talked to a lot of homeless and non-homeless clients of our social service system.

12:53:35

LEVENTHALI'm the chairman of the Health and Human Services committee. I've spent a great deal of time in our social service agencies' reception rooms, shelters, et cetera. In many, many cases -- not all, but many -- the cash feeds addiction and substance abuse, and they're looking for cash to spend it the way they want it. And it really isn't an issue of a shortage of food.

12:53:54

SHERWOOD(unintelligible) ...

12:53:54

LEVENTHALIf people need a meal, we have many...

12:53:57

SHERWOODThere are plenty of meal programs.

12:53:58

LEVENTHALIt's not hard to get a meal in Montgomery County.

12:53:59

SHERWOODNor anywhere in an urban area.

12:54:00

LEVENTHALRight. Right.

12:54:01

SHERWOODIs this worse now than it used to be a couple years ago or five years ago or 10 years ago? What prompts us to be more aggressive about panhandling now?

12:54:11

LEVENTHALIn 2006, the county did a survey of street panhandlers on a single day, and it found 56. In 2013, the county did a survey of street panhandlers on a single day, and it found 33. That's all the evidence we have. We -- only twice in the 11 years I've been a councilmember, both studies, I urged the county, do -- have we ever measured the numbers? So...

12:54:33

12:54:41

12:54:41

12:54:43

SHERWOOD(unintelligible).

12:54:44

LEVENTHALYeah.

12:54:44

NNAMDIHere's another argument from Sarah in Waldorf, Md. Sarah, you're on the air. Go ahead, please.

12:54:49

SARAHHi, Kojo. Thanks for taking my call. There's a big question that's sort of bubbling up in the charitable community these days about the difference in impact between giving money to people directly and letting them use it how they think will work best for them and giving money to charities and allowing them to provide goods and services that, you know, they think will somehow help poor people.

12:55:15

SARAHAnd so a two-part question. The first question is, are we sure that the charities are doing more for some of these people than these people could do for themselves? There's no question that obviously some panhandlers are probably fakes, and some of them are probably addicts.

12:55:28

NNAMDIAnd your second question?

12:55:29

SARAHBut some of them are probably not. The second question is -- I'm not really sure how Montgomery County council thinks that they know better than citizens what the citizens should be or want to be doing with their money. I...

12:55:39

NNAMDII should be able to do with my money whatever the heck I feel as far as...

12:55:42

LEVENTHALYep. Well, what we've heard here is the range of opinion that I've heard from my constituents. most of my constituents think it's commonsense that if we discourage people from giving to panhandlers, panhandling will diminish, that if people don't give, then it won't be a lucrative activity. I also hear from folks who say, these bums ought to be put away, and we ought to crack down and we ought to use law enforcement.

12:56:01

LEVENTHALAnd I also hear from people who say, you're being patronizing. And rich people should not dictate to poor people. And I understand all those views, and I'm sympathetic to all of those views. I'm comfortable, as a matter of public policy, with urging my constituents not to give to panhandlers and to give to charity. I think that's a matter of good public policy and good commonsense.

12:56:19

NNAMDIYou've said this is about safety and about morality. It's my understanding you were at an intersection earlier this week where a panhandler was killed this past spring?

12:56:27

LEVENTHALThat's exactly right. It's a very sad story that, in May, a woman panhandling in Wheaton at Veirs Mill Road and Georgia Avenue was struck by a van that bounced off the road. And she died, and that's the kind of thing we don't want to have any longer. And so walking in the roadway, walking in the median is dangerous, and that's part of what motivated us to act as a county to communicate this message.

12:56:51

SHERWOODMontgomery is becoming much more of an urban county. Do you see this as potentially growing? If you don't act now, you can see a much -- you could have more poor people now, your school systems getting more poor in the county. There's a lot more people in need, families...

12:57:06

NNAMDIIs this really a conversation also about poverty in Montgomery County?

12:57:09

12:57:19

LEVENTHALRight. So we are an affluent county, and we do have a rising poverty rate. Panhandlers, in the last survey we did, about a third of them were not -- did not sleep last night in Montgomery County. Montgomery County's a wealthy county, and I think that attracts panhandlers. We have grown in poverty in Montgomery County. I can't say whether the numbers of families in poverty correlates with what we found in March, which was 33 panhandlers. I'm not sure there's a real correlation there.

12:57:47

SHERWOOD(unintelligible) not talking about the, again, the person who has a small child or two children with them, help me get on the bus or help me go here or help...

12:57:55

LEVENTHALWell, one thing I can confidently tell anyone listening to this show is that no family with children sleeps on the streets in Montgomery County. We have, for many years, ensured that where we are made aware of a family with children that's homeless, they get shelter, they get either emergency shelter or a motel place.

12:58:09

NNAMDIJust about out of time. George Leventhal is a member of the Montgomery County council. He's a democrat who holds an at-large seat. He's putting in place a public awareness campaign that would allow people to give money using their cellphones to a nonprofit working on this issue. Tom Sherwood is our resident analyst. He's an NBC 4 reporter and a columnist for the Current Newspapers. Always a pleasure.

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